Receive our Latest Newsletters by Email

Arabian Business Subscription

SME sentiment suffers in Q2, survey shows

UAE SMEs have become more cautious due to market turbulences around the world.

UAE SMEs are less optimistic about the sales and growth potentials for the next three months, a survey has shown.

The results of Q2 2015 UAE SME Sentiment Survey by Gulf Finance Corporation, a wholly-owned subsidiary of SHUAA Capital, further detected a decline in total orders received and a decrease in ability to collect payments and raise finance among local SMEs.

Eight out of 10 of those surveyed had a positive or very positive growth and sales outlook, despite seeing a dip in payment collection to 61 percent, down from 69 percent in Q1, and ability to raise finance to 63 percent, down from 78 percent in Q1.

Only 62 percent are planning on increasing their headcount in the third quarter, which is lower than 84 percent in Q1.

71 percent of respondents interviewed confirmed total orders received increased or significantly increased, down from 84 percent in Q1, whilst 16 percent said they remained the same.

When it comes to future plans, only half of the surveyed SMEs are planning on expanding their product range, which is down from 63 percent in the previous quarter.

However, an increasing number of SMEs, 37 percent, which is an 85 percent increase from only 20 percent in Q1, wish to expand into new territories; 25 percent plan to invest in infrastructure while 15 percent desire to open new outlets.

Employee benefits remained last with 17 percent, only one percent higher than in Q1, plan to invest in this area.

Commenting on the findings, David Hunt, CEO of Gulf Finance, said: “The findings of the SME Sentiment Survey indicate a softening of the SME sector and are consistent with the trends we are currently seeing in the market.

“The slowdown can be attributed to macroeconomic issues having a dampening effect on general market conditions, which, coupled with the generally quieter summer months, has had an impact on the performance and sentiment of the SME sector as a whole.

“That said, it is encouraging to note that outlook on sales and growth for the next quarter remain positive, albeit not as bullish as in the beginning of the year.”